Tuesday, May 19, 2009

We measure the economy every day, for example, but our smartest economists just happened to miss the current worldwide recession.We invent a device like the telephone and then predict that it will never replace the telegraph (on the one hand), and that it will bring about a universal language and world peace (on the other).

In the case of the telephone, however, one person in particular got the future right, and well before anyone else.That person happened to be its inventor, Alexander Graham Bell.

In a remarkable 1878 letter to the organizers of the Electronic Telephone Company, Bell described a universal point-to-point service connecting everyone through a central office in each community, in turn, to be connected by long-distance lines.

What is stunning about Bell’s vision is that the available technology did not permit universal, switched, long-distance service.He was describing something that he could not build, at least in 1878, but that would exist in all its pieces and parts a century later.

Sociologist Ithiel de Sola Pool pondered why the only forecaster to get the future of the telephone right—and really right—was the inventor.He offered five theories:

1. Bell was a smart guy, perhaps just brighter than the rest of the world.

2. Bell was living with the telephone eighteen hours a day, year after year.Better than anyone, he understood its capabilities and potential.

3. Bell was a speech expert who approached the problems of telecommunications from the outside.Folks like Western Union and Elisha Gray thought of the telephone as an extension of the telegraph—the “fallacy of historical analogy”—and missed the future.

4. Bell was not a scientist but, like Morse, Edison, Ford, and Land, was both an inventor and capitalist.These men were interested in what might be theoretically possible and what might sell; “the optimism of their speculation was controlled by a profound concern for the balance sheet.”

Personally, I find the last item especially compelling; when Edison’s notebooks on devising the nation’s first power grid were examined, they showed on every page “calculations of the system’s market potential, the price charged for competing gas illumination, the cost of copper wiring, and other entrepreneurial concerns.”

There's something about pushing a technology ahead with a profit motive in mind that creates a sense of clarity. Most successful entrepreneurs become good at telling the story of a rosy future. Some have a great technology but no business plan. Some have a great business plan but no technology. The ones who succeed have both, or access to both, and clearly separate the real and now from the purely aspirational.

So when we think about Alexander Graham Bell running a (so-called) pre-revenue company, and being so very right about its future, we can assume that being brilliant, living 24/7 with the innovation, and avoiding historical analogy were all contributing factors.Maybe, too, the idea of constantly iterating the possible, the impossible, the practical, and the the profitable was also decisive.

And then again, maybe when all is said and done, Bell was just plain lucky. That's how we get most of our really good forecasts, even today.

Wednesday, May 13, 2009

One of the lessons of the current recession is that we are, more often than not, just plain clueless when it comes to forecasting our economic future.And it’s not for a lack of trying.We give the smartest people in America reams of market data, we create marvelously complex forecasting models, and we end up with vastly conflicting, generally misguided points of view.

More than that, we completely miss the Big Events--the current recession being a good example.

It is the American condition, however, that being bad at something doesn’t stop us from doing it, and doing it enthusiastically.

With this in mind, I’ve been watching the swirl over Twitter, Facebook, the future of search, Second Life, radio, the music industry, the electric automobile, and television.Not only is the debate about our technology future downright confusing, it’s downright nasty. Technology has become our new religion, our new politics. To say you support “open source” in certain cocktail settings is like saying you would like to see a socialist President, or suggesting that only Christians can get into heaven.It’s brutal out there.

This is what I was thinking as I read Ithiel de Sola Pool’s 1977 The Social Impact of the Phone.In particular, one chapter examines all of the forecasts made about the telephone from 1876 to WWII. It's a good reminder that we—all of us, worldwide and over time--are really, truly are bad at this forecasting stuff.

Monday, May 4, 2009

One of the great consumer products of the twentieth century was the Kodak Brownie camera. It premiered in February 1900, cost one dollar, and did for picture-taking what the Model T would soon do for American driving.

When I was very young I owned a Brownie Bullet, purchased for a special family visit to theNew York World’s Fair in Queens in 1965.I adored that camera, even after I dropped it on the ground near the Westinghouse Time Capsule, cracked its case, and took another three years of pictures with a sun streak down the right side of every print.

So, the other day when I accidentally dropped my Kindle 2 (to no great effect, fortunately), the Brownie flashed before my eyes.